PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩700 per share · Prices as of the 2026-10-02 close
Webzen still relies on its long-running MU IP for more than half of revenue, while seeking new growth drivers through portfolio diversification and expanding overseas sales.
Revenue and operating profit fell sharply in 2025, but net income showed a recovery trend in 2026 due to base effects.
As of Q1 2026, overseas revenue share reached 51%, surpassing domestic sales, while the MU IP still accounts for more than half of revenue.
A publishing contract dispute with Hound13, developer of the open-world RPG Dragon Sword, escalated into litigation and disrupted the new title's momentum.
From the second half of 2026, the company plans to sequentially reveal new titles such as Project D1, Gate of Gates, and Project G, and will participate in G-STAR 2026 in November.
Financial health remains stable, supported by a low debt ratio and consistent operating cash flow.
Founded in 2000 and listed on KOSDAQ, Webzen has developed and serviced online and mobile MMORPGs centered on its flagship MU series. Its main revenue comes from the mobile, royalty, and internet segments of Webzen and Webzen RedCore, with R2, ShotOnline, and Metin2 as additional revenue sources.
In Q1 2026, the MU IP generated 24.5 billion won, or 62% of total revenue, while revenue from R2, ShotOnline, and Metin2 increased year over year. By region, overseas revenue share climbed to 51%, overtaking domestic sales as the domestic market contracted.
To reduce reliance on a single IP, Webzen is pursuing genre diversification through multiple pipeline titles: the in-house collection RPG Terbis, the Naver Webtoon IP-based strategy RPG Project D1, the published open-world action RPG Dragon Sword, the strategy defense title Gate of Gates, and Project G, a new MMORPG based on the MU IP.
Development is handled by subsidiaries including Webzen Crevics, Webzen Redstar, and Webzen Nova, and in 2026 the company additionally established new subsidiaries, Webzen M and Webzen Redgear, to strengthen in-house development capabilities.
Competitively, the domestic MMORPG market is intensifying as major players such as Netmarble, Pearl Abyss, and Kakao Games roll out new titles and expand their own IPs.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩39.1B | ₩6.2B | 15.8% |
| 2025Q3 | ₩43.8B | ₩7.6B | 17.4% |
| 2025Q4 | ₩49.9B | ₩7B | 14.1% |
| 2026Q1 | ₩39.4B | ₩5.4B | 13.7% |
| 2026Q2 | ₩38B | ₩5.7B | 14.9% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩242.1B | ₩83B | ₩72.4B | 34.3% | 12.7% | 12.6% |
| 2023 | ₩196.3B | ₩49.9B | ₩57.6B | 25.4% | 9.3% | 12.7% |
| 2024 | ₩214.7B | ₩54.6B | ₩56.9B | 25.4% | 8.5% | 11.6% |
| 2025 | ₩174.4B | ₩29.7B | ₩24B | 17.0% | 3.5% | 12.3% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-22
Annual revenue moved from 242.1 billion won in 2022 to 196.3 billion won in 2023, 214.7 billion won in 2024, and 174.4 billion won in 2025, showing an overall contracting trend despite year-to-year fluctuations.
Operating margin declined from 34.3% in 2022 to 25.4% in both 2023 and 2024, then fell further to 17.0% in 2025.
Net income attributable to owners held near 72.4 billion won in 2022, 57.6 billion won in 2023, and 56.9 billion won in 2024 before dropping sharply to 24.0 billion won in 2025, a decline attributed to falling MU IP revenue combined with one-off costs related to new title issues.
On a quarterly basis, Q3 2025 revenue of 43.8 billion won, operating profit of 7.6 billion won, and net income of 8.9 billion won improved from the prior quarter, but Q4 2025 revenue rose to 49.9 billion won while net income stayed around 7.0 billion won.
In 2026, Q1 revenue was 39.4 billion won with operating profit of 5.4 billion won and net income of 8.9 billion won, followed by Q2 revenue of 38.0 billion won, operating profit of 5.7 billion won, and net income of 6.3 billion won, with revenue and operating profit remaining below year-earlier levels.
Net income nonetheless showed a recovery pattern versus the prior year, though this reflects a comparison base effect from the weaker first half of 2025 rather than an improvement driven by new-title performance.
Over the trailing four quarters (Q3 2025 through Q2 2026), cumulative revenue totaled roughly 171.1 billion won with owner net income around 31.0 billion won, a modest improvement from the 2025 annual trough. Operating cash flow has remained positive every year, supporting the company's overall financial stability.
The domestic game market has entered a phase of stagnating engagement amid factors such as increased outdoor activity and softer discretionary spending, leaving Webzen and many peers struggling to defend earnings.
In contrast, the global game market is reportedly expected to grow at an annual rate of about 4-5% from 2025, highlighting a clear gap in growth pace between domestic and overseas markets.
Against this backdrop, Webzen has raised its overseas revenue share above the domestic level, restructuring its cash-generating base toward international markets.
The domestic competitive landscape is intensifying as major new titles such as Netmarble's Seven Deadly Sins: Origin and Pearl Abyss's Crimson Desert launch in quick succession, sharpening competition in the open-world and action genres.
As a relatively smaller KOSDAQ-listed developer, Webzen trails larger peers in scale of new-title investment and marketing resources, but maintains a defensive position based on the stable cash generation of its long-running IPs and a low debt ratio.
The broader industry cycle is marked by simultaneous launches of console and PC open-world titles, adding pressure on Webzen, historically centered on mobile MMORPGs, to expand across platforms and genres.
Webzen has stated plans to begin actively disclosing new-title information from the second half of 2026.
Project D1, a strategy RPG based on a Naver Webtoon IP under development by subsidiary Webzen Crevics, had its first information reveal in the second half targeting a 2027 launch, while the strategy defense title Gate of Gates is also scheduled for additional disclosures.
Project G, a new MMORPG based on the MU IP aimed at Western markets as well, is being developed on Unreal Engine 5 by subsidiary Webzen Redstar, with its first cinematic footage already unveiled. The collection RPG Terbis plans to continue expanding overseas awareness through events including Japan's Comiket.
Webzen has confirmed participation in G-STAR 2026 at BEXCO in Busan this November, marking its fourth consecutive year at the show, to promote its upcoming titles.
However, the open-world RPG Dragon Sword remains embroiled in litigation stemming from a publishing contract dispute with developer Hound13; a court rejected Webzen's injunction against Hound13's independent publishing, allowing Hound13 to launch its own Steam version, and Webzen has stated it plans to appeal the ruling.
Management has said it will continue investing in new-title development while also reviewing additional shareholder-return measures such as special dividend payments and a reduction of capital reserves.
Webzen has maintained a net-profit basis over the past four quarters, with net income showing a recovering trajectory since the 2025 earnings trough. Hyundai Motor Securities initiated coverage on Webzen in a report dated September 2, 2026, assigning a 'Market Perform' rating and a target price of 13,000 won.
The report cited Webzen's ability to sustain profitability through efficient operations, in contrast to competitors turning to losses amid aggressive investment expansion, as well as a price-to-book ratio that remains low even within the game industry.
The same report noted, however, that improving its reputation as a publisher and delivering successful new titles are key to any mid-to-long-term re-rating.
Relative to periods of larger past earnings, the stock trades at a comparatively modest premium to book value, with the trajectory of new-title performance and the stabilization of MU IP revenue seen as the key variables shaping valuation going forward.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-08-22
Long-running titles including the MU IP still account for more than half of revenue, serving as a stable cash-generating base. Overseas revenue share reached 51% in Q1 2026, surpassing domestic sales and reducing reliance on the stagnant domestic market. This overseas expansion has functioned as a buffer against domestic market weakness.
Moving beyond an MMORPG-only lineup, the company is simultaneously preparing titles across genres, including the collection RPG Terbis, the strategy RPG Project D1, the strategy defense game Gate of Gates, and the MU-based new title Project G.
To strengthen in-house development, additional development subsidiaries were established in 2026. As information on these titles is set to be revealed sequentially from the second half, lineup visibility is gradually improving.
The debt ratio has stayed below 15% every year, and operating cash flow has been positive across all four years. Even in 2025, when net income declined significantly, the company remained profitable rather than turning to a loss.
This financial stability provides a foundation for pursuing both new-title development investment and shareholder-return policies simultaneously.
The MU IP still accounted for 62% of total revenue as of Q1 2026, maintaining an overwhelming share. This structural concentration, with MU exceeding 60% of revenue over the past five years, has persisted.
If the IP's aging continues to drag on revenue and new titles fail to grow enough to offset it, overall earnings will remain under pressure.
A contract-termination dispute erupted with developer Hound13 over publishing rights to the open-world RPG Dragon Sword, and after a court rejected Webzen's injunction, Hound13 independently relaunched the game.
The episode revived scrutiny of Webzen's history of abrupt service terminations, raising questions about its reliability as a publisher. This trust issue could weigh on future contract negotiations with external developers.
Domestic gaming engagement has stagnated, with domestic revenue posting double-digit year-over-year declines. Major companies such as Netmarble and Pearl Abyss have released successive new titles, intensifying competition in the MMORPG and open-world genres. With relatively limited resources, Webzen faces a challenging environment in defending its market share.
The main lawsuit over Dragon Sword publishing rights with Hound13 remains ongoing, and Webzen has stated it plans to appeal the injunction rejection. Depending on the outcome, additional financial burdens or damages could arise. There is also an unresolved matter regarding Webzen's roughly 30 billion won equity investment in Hound13.
Revenue from the core MU IP has shown a persistent declining trend. In Q3 2025, MU revenue fell 21.7% year over year, and in Q1 2026 it declined a further 17% year over year and 9% quarter over quarter.
As new titles remain in development or early-service stages, there is no clearly established alternative growth driver to fill the revenue gap in the near term.
The domestic game industry is exposed to policy changes such as regulations on probability-based in-game items and strengthened user-protection rules. A slowdown in the broader economy could reduce discretionary spending on in-game purchases.
Webzen's management has also cited rapidly changing industry conditions such as AI adoption and an economic slowdown as key challenges to manage.
Check whether new titles such as Project D1 are demoed at G-STAR 2026 in Busan and gauge public reaction.
Watch for additional information disclosures on Gate of Gates and the MU-based Project G, and whether concrete launch timelines are announced.
Assess whether the decline in MU IP revenue continues and whether additional one-off costs related to the Hound13 dispute are reflected.
Monitor the outcome of Webzen's appeal and the final ruling on publishing rights, and their impact on financials and reputation.
Check whether concrete shareholder-return measures mentioned by management, such as special dividends or a capital reserve reduction, are formally disclosed.
Webzen is a KOSDAQ-listed game company that has long maintained stable cash generation centered on its MU IP, and is now undergoing a structural shift toward a higher overseas revenue share.
Both revenue and operating profit fell sharply in 2025, forming a trough, while net income in the first half of 2026 showed a recovery driven largely by a favorable comparison base rather than improved new-title performance, warranting caution in interpretation.
The publishing dispute with Hound13 over the open-world RPG Dragon Sword has not yet been fully resolved in court and has also raised questions about Webzen's reliability as a publisher.
From the second half of 2026, information on a diversified new-title lineup including Project D1, Gate of Gates, and Project G is scheduled to be revealed, making market reaction at upcoming events such as G-STAR 2026 an important indicator to watch.
Financially, the company maintains stability through a low debt ratio and consistent cash flow, and management has stated it is reviewing additional shareholder-return measures.
Overall, Webzen sits at a transitional point between the aging of its existing cash cow and diversification into new titles, with the actual performance of these new titles remaining the key variable shaping future results.
Report written 2026-09-05 · Data as of 2026-09-04
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